4 Ways To Get Out Of Debt And Beat The Odds

Most Americans have grandparents who waited to retire until they were debt free. Times have change and many Americans are now retiring with a boatload of debt. Until recently most were not concerned about going into retirement with debt, but that is now changing thanks to the recession.

More than 20% of those ready to retire owe more than $50,000 in debt other than their home mortgage. This has increased by approximately 10% in just two years.

Another 40% have non-mortgage debt of at least $25,000, again up 10% in just two years. Many are now realizing this is a problem and want to do something so they can retire debt free.

To help achieve your goal, here are just a few ways to get out of debt:

Develop a plan.

As one financial expert will tell you, you must tell your money where to go or it will just go out the window. Set goals that you can realistically meet. Don't think this process will happen overnight though. It took some time to accumulate this debt, and it will take some time to pay this off.

Pay down your debt while continuing to save for retirement.

Many experts will tell you to do one or the other. It is best to bring your debt under control first. This does not mean you have to quit saving for retirement completely, but it is best to cut back on retirement savings considerably. The reason for this is high interest rates. If you are earning 8-10% on your retirement savings but paying 24-30% on credit cards, you will see a net loss. Try to pay down the debt quickly so you can put more away for retirement each month.

Continue contributing to our 401(k) and don't borrow against it.

If your employer matches your contributions to your 401(k), keep putting that amount in as you want the free money you are getting from your employer. Don't borrow against this either. There are strict rules regarding the repayment of this loan if you are fired or laid off.

Plan on working longer, at least until your financial obligations are paid off.

This is a smart move for anyone who reaches retirement age with non-mortgage debt. Even if you only have mortgage debt, it is best to pay it off before you stop working. It is hard to make ends meet on a fixed income. Debt makes this process harder.

You can retire debt free. It just takes some planning on your part. Get started today as each day does count. You don't want to delay your retirement any longer than is absolutely necessary. By following the above ways to get out of debt, you can retire comfortably at a reasonable age and still have lots of life left in you.

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